There has not been a lot of love for Westpac Banking Corp (ASX: WBC) shares this year.
Due to the bank stepping back from its bold cost reduction targets, its shares have lost over 5% of their value this year. That's despite a recent rally which has seen Westpac's shares rise 7.5% since earlier June.
As a comparison, the rest of the big four banks are either flat or recording a decent gain year to date.
Is anyone positive on Westpac shares?
One leading broker that remains positive on Westpac shares is Morgans. In fact, the broker has once again named the bank on its best ideas list this month.
Morgans explains that its best ideas are those that it thinks offer the highest risk-adjusted returns over a 12-month timeframe. They are supported by a higher-than-average level of confidence and are its most preferred sector exposures.
In respect to Westpac, the broker said:
We endorse an ADD rating for WBC. WBC has a similar asset base, funding mix and domestic retail concentration as the premium priced CBA. However, its growth, profitability and ROE have been significantly weaker than this larger competitor, which is ultimately reflected in WBC's lower earnings and asset-based trading multiples and higher cash yield. If WBC can materially improve its business performance (this is not without significant risk of disappointment) then an investment in its stock could deliver attractive returns as the share price rerates upwards and cash returns to investors lift.
Morgans currently has an add rating and a $22.58 price target on the bank's shares.
In addition, the broker is forecasting fully franked dividends per share of 146 cents in FY 2023 and then 147 cents in FY 2024. Based on the current Westpac share price of $21.53, this will mean dividend yields of 6.8% in both years.